South Africa’s Covid-19 fight has been given a $4.3bn boost by the International Monetary Fund – but the help comes with what the Institute of Race Relations (IRR) has welcomed as an unambiguous message in favour of ‘growth-enhancing structural reforms’.
In its statement late yesterday, the IMF made it clear what it expects of the South African government: ‘a pressing need to strengthen economic fundamentals and ensure debt sustainability by carrying out fiscal consolidation, improving governance and operations of SOEs, and implementing other growth-enhancing structural reforms’.
The IRR noted today that these key points echo the thrust of its communications through diplomatic and other channels over the past two months to alert prominent IMF donor nations to their critical role in strengthening the drive for solution-based support and efforts to overcome fundamental weaknesses in the South African economy.
Significantly, the IMF singled out South Africa’s pre-Covid-19 structural weaknesses – repeatedly highlighted by the IRR – when it noted: ‘A deep economic recession is unfolding as the decline in domestic activity and disruptions in the global supply chain resulting from the Covid-19 shock have added to a pre-existing situation of structural constraints, subdued growth, and deteriorating social outcomes.’
Said IRR deputy head of policy research Hermann Pretorius: ‘This is a significant moment for us as a country – a win for South Africans who have found their voice in demanding accountability from government.’
He added: ‘The SACP-ANC government should consider itself on notice: destructive policies such as expropriation without compensation will not be tolerated – not by South Africans suffering under the mounting effects of a decade of economic lockdown, and not by the IMF donor nations whose support in this difficult time gives ordinary South Africans a stronger hand in demanding a free and open economy that works, not just for an elite politically connected few, but for all people who crave real economic empowerment.’
News24 reported that the IMF decision followed months of engagement between Treasury and IMF management, and formed part of R95 billion being sought from multilateral institutions to support job creation and protection of businesses affected by the pandemic.
The IMF said South Africa had committed to manage the emergency financial assistance with ‘full transparency and accountability’.
Finance minister Tito Mboweni commented last night: ‘Going forward, our fiscal measures will build on our policy strengths and limit the existing economic vulnerabilities which have been exacerbated by the Covid-19 pandemic.’
Positive cases grew in South Africa yesterday by 7 096 to a cumulative total of 452 529 (with 274 925 recoveries). Deaths rose by 298 to 7 067.
The highest tally of cases is in Gauteng (162 319), followed by the Western Cape (92 600), the Eastern Cape (74 231) and KwaZulu-Natal (65 982).
Days after dwelling at length on the government’s commitment to stamp out Covid-related corruption in his address to the country last week, President Cyril Ramaphosa yesterday accepted a request for leave of absence from all government tasks from his spokesperson Khusela Diko, pending investigations into allegations involving her and her husband and tender regulations in the Gauteng Department of Health.
This followed a Sunday Independent report that a R125-million personal-protective equipment (PPE) contract was allegedly awarded to disputed AmaBhaca king, Madzikane II Thandisizwe Diko, who is Diko’s husband. News24 reported that Diko and her husband maintained the money was never paid to his company and that, as the Sunday Times had reported earlier, the contract was never finalised.
Economic Freedom Fighters leader Julius Malema rounded on Ramaphosa’s handling of the pandemic, and called not only for a return to a level 5 lockdown, but for the postponement of next year’s local government elections.
Independent Schools Association of Southern Africa executive director Lebogang Montjane described as ‘regrettable’ the threat by the Congress of South African Students to shut down private schools, pointing out that independent schools had never completely closed but had continued teaching online during the hard lockdown.
In other virus-related news
- World Health Organization (WHO) chief Dr Tedros Adhanom Ghebreyesus warned that there was ‘a long hard road ahead of us’ in tackling the pandemic and that there was little prospect of the emergency status of the infection being changed. WHO officials acknowledged that further lockdowns in countries experiencing renewed outbreaks may be necessary, but suggested they should be as short as possible, and confined to as small a geographic area as possible;
- Infections in India, which has the third highest number of cases in the world, passed 1.4 million after it registered a record of nearly 50 000 new cases in 24 hours. More than 30 000 people have died of Covid-19 in the country since January, when the first case was reported;
- Reuters said more than 16.25 million people had been reported to be infected globally and 646 841 had died in more than 210 countries and territories;
- The United States announced it had doubled its investment – to nearly $1 billion – to hasten development of a potential Covid-19 vaccine by American firm Moderna, which began the final phase of clinical trials yesterday; and
- A pet cat in Weybridge became the first animal to test positive in Britain. The government said there was no evidence that the cat transmitted the disease to its owners or that pets or other domestic animals were able to transmit the virus to people.